Reinvestment in your business

- So you made a profit this year, that's terrific!…Pop some champagne, you need to celebrate.…Now the big question is, what to do with that profit?…It's a great problem to have,…but one that does require some thinking.…There's two basic things you can do with the money.…You can either keep it in the company…and use it for growing your business,…or you can take it out and keep it for yourself.…If you run nonprofit, you only have one choice,…to keep it in the company.…If you're thinking of taking money of your business,…you have to decide how you're going to take the money out.…

There are essentially two ways…to take money out of your business.…The first is through your salary…and the other is through draws, disbursements,…and dividends.…In sole proprietorship, and partnerships,…there's no difference between salaries and disbursements.…The business is essentially an extension of the owners,…so both disbursements and salaries…are considered personal income…and are treated by the tax authorities as such.…Just make sure you set up drawer account…